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Global trade has always been complex but in 2025, the pace and unpredictability of change have reached new heights. From shifting tariff regimes and export controls to new terrorism designations and ownership rules, compliance professionals are under increasing pressure to assess and manage third party risk.
In our recent webinar, “Trade, Tariffs, and Terrorism: Navigating Third-Party Due Diligence in a Shifting Risk Landscape,” experts Kathryn Nickerson (former Assistant Chief Counsel, U.S. Department of Commerce) and James Tillen (Member, Miller & Chevalier Chartered) shared insights into recent trade and sanctions developments and their implications for global compliance teams.
Here are five key takeaways from the discussion:
1. Trade and Sanctions Are Now National Security Tools
Tariffs and sanctions are no longer just economic levers. They’re being used to advance national security and foreign policy priorities. Recent designations under the International Emergency Economic Powers Act (IEEPA) and the Foreign Terrorist Organization (FTO) framework mark a new era where criminal cartels, not just ideological groups, are being classified as security threats. For companies, this expands sanctions exposure in regions like Latin America and increases the need for robust due diligence on third parties, intermediaries, and supply chains.
2. Ownership Due Diligence Remains Central to Sanctions Compliance
While the BIS issued an interim final rule to expand export restrictions through a similar “Affiliates Rule,” implementation will be suspended for one year starting November 10, 2025, following the recently reported U.S.–China economic and trade deal. When reimposed, the Affiliates Rule will further align BIS controls with OFAC’s approach and raise the bar for ownership due diligence.
For now, organizations should continue to monitor ownership changes, document decisions, and apply risk-based due diligence to stay ahead of evolving sanctions expectations.
3. Enforcement Is Expanding—Across Agencies and Legal Theories
The DOJ and DHS (specifically CBP and HSI) are coordinating more closely than ever through the newly formed Trade Fraud Task Force, with an explicit mandate to pursue customs and tariff evasion under the False Claims Act and even criminal smuggling statutes. The government’s focus on “reverse false claims” means that underpayment of duties or misclassification of imports could lead to significant civil and criminal liability—often initiated by whistleblowers.
4. Compliance Programs Must Be Cross-Functional and Proactive
The days of treating trade compliance as a siloed function are over. With shifting regulations and tariffs, companies should establish cross-departmental task forces—linking trade, compliance, legal, finance, procurement, and supply chain—to anticipate risks and coordinate responses. Agencies like OFAC, BIS, and DOJ all provide detailed compliance guidance, and proactive engagement with regulators can significantly mitigate penalties.
5. Continuous Monitoring and Ownership Transparency Are Non-Negotiable
As ownership structures and sanctions lists evolve, one-time checks are no longer enough. Continuous screening, escalation protocols, and well-documented decision-making are now essential parts of a strong trade compliance program. Organizations must also reassess their third-party risk management frameworks to ensure ongoing monitoring of suppliers and intermediaries—particularly in high-risk jurisdictions or industries vulnerable to infiltration by cartels or sanctioned entities.
The trade and sanctions environment is more complex than ever, blurring the lines between compliance, national security, and foreign policy. Organizations that integrate technology, collaboration, and transparency into their third-party due diligence programs will be best positioned to stay ahead.
At Ethixbase360, we help companies adapt to this new era of compliance, delivering the visibility, automation, and expert support needed to manage evolving third-party and trade-related risks.
